Amylin and Lilly part company over exenatide differences

Amylin is ready to pay up to $1.6bn to free itself from a decade-long marketing pact with Eli Lilly for its exenatide diabetes franchise

Amylin is ready to pay up to $1.6bn to free itself from a decade-long marketing pact with Eli Lilly for its exenatide diabetes franchise.

The move ends an acrimonious and litigious period for the two companies prompted by Lilly's decision to form a partnership with Boehringer Ingelheim earlier this year for Trajenta (linagliptin), a rival diabetes treatment.

"After nearly a decade-long partnership that achieved a number of important milestones on behalf of people living with diabetes, the companies determined it was in the best interest of all constituents to amicably terminate the collaboration," said Amylin in a statement.

As a result of the agreement a lawsuit filed by Amylin against Lilly in May, which sought among other things to stop Lilly using the same salesforce to market Byetta and Trajenta, has been dropped.

Amylin and Lilly worked together on the development of Byetta (exenatide), a twice-daily injection which, in 2005, became the first GLP-1 agonist to gain marketing approval in the US.

The two companies extended the franchise with a longer-acting, once-weekly version under the Bydureon brand name in Europe earlier this year, although to date they have been unable to secure approval in the US with the Food and Drug Administration (FDA) asking for more information on the drug earlier this year. An extended FDA review of the new formulation is due to complete in January 2012.

The transition of sole rights to exenatide to Amylin begins in the US later this month and will have taken place in all territories by the end of 2013. Amylin is paying Lilly $250m upfront, plus 15 per cent of global net sales until a threshold of $1.2bn plus accrued interest is reached.

If Bydureon fails to win US approval Lilly's cut of the exenatide franchise reduces to 8 per cent, while another $150m becomes payable if a once-monthly formulation of exenatide – currently in Phase II trials – wins US approval.

Amylin recorded Byetta sales of $385m in the first nine months of 2011, with the product accounting for more than 80 per cent of its total turnover.

Currently, Lilly takes 50 per cent of Amylin's gross margin on US Byetta sales, and 100 per cent of its Byetta and Bydureon sales outside the US. It also derives revenue from the sales of Byetta pen delivery devices to Amylin. All told, the franchise has added around $320mto Lilly's coffers year-to-date.

Amylin is now seeking partners to help it sell exenatide products outside the US market.